Pub­li­ca­tions

Pow­er of Attor­ney — Changes are here!


In Brief

pow­er of attor­ney is like insur­ance. If you have not planned for the worst when the unex­pect­ed occurs you might find that you, your legal and finan­cial affairs and your fam­i­ly and friends all suf­fer to a much greater degree than nec­es­sary. Angela Har­vey, part­ner, and Euge Pow­er, solic­i­tor, pro­vide some Q&A to demys­ti­fy this top­ic for those inter­est­ed in elim­i­nat­ing some of the risk to them­selves and oth­ers in life. 


What is a Pow­er of Attorney?

An attor­ney is a per­son with author­i­ty to man­age anoth­er person’s legal and finan­cial affairs. A pow­er of attor­ney is there­fore a legal doc­u­ment that gives the pow­er of an attor­ney to a per­son to man­age anoth­er person’s legal and finan­cial affairs. The attor­ney can be any­one over 18. Com­mon­ly peo­ple appoint a rel­a­tive, friend or pro­fes­sion­al advis­er as their attor­ney. There are two types of pow­er of attor­ney – a gen­er­al pow­er of attor­ney and an endur­ing pow­er of attorney.

What is a gen­er­al pow­er of attorney?

gen­er­al pow­er of attor­ney pro­vides the pow­er for anoth­er per­son to han­dle your legal and finan­cial affairs for a short peri­od of time, or in rela­tion to a par­tic­u­lar mat­ter. This can be use­ful if you are going over­seas and need some­one to look after your affairs or a par­tic­u­lar issue which may arise while you are away. It ceas­es to be effec­tive upon the prin­ci­pal lack­ing capac­i­ty (or as oth­er­wise set out in the document).

What is an endur­ing pow­er of attorney?

An endur­ing pow­er of attor­ney is a pow­er which endures past the point where the prin­ci­pal has lost men­tal capac­i­ty. It can be use­ful because as you get old­er, and even­tu­al­ly lack capac­i­ty, you may have dif­fi­cul­ty look­ing after your legal or finan­cial affairs, and your attor­ney can man­age those affairs for you.

An endur­ing pow­er of attor­ney does not grant your attor­ney the pow­er to make deci­sions in regard to per­son­al or health relat­ed issues. An endur­ing guardian doc­u­ment, while sim­i­lar, is a dif­fer­ent doc­u­ment to be signed to appoint some­one to look after your per­son­al, med­ical treat­ment and health treat­ment in the event that you lat­er lack the capac­i­ty to make those deci­sions yourself.

Can com­pa­nies sign pow­er of attor­ney documents?

Yes, and a thor­ough estate plan should include pow­ers of attor­ney for fam­i­ly com­pa­nies, to ensure that the com­pa­ny can con­tin­ue to run seam­less­ly after a direc­tor los­es capac­i­ty. Com­pa­ny pow­er of attor­ney doc­u­ments can also be an effi­cient way to appoint per­sons to sign on the company’s behalf who may not be directors.

What should I look out for?

Have it before you need it
A pow­er of attor­ney is a doc­u­ment you need to have ready before it is need­ed. Whether it is a gen­er­al pow­er of attor­ney because of trav­el, or an endur­ing pow­er of attor­ney because of an acci­dent or sud­den ill­ness, you may be pre­vent­ed from giv­ing these pow­ers to those you trust because of the sud­den cir­cum­stances in which you find your­self.

Be care­ful – It is an impor­tant power
Although an attor­ney must always act in your best inter­est, issues can and do arise when an untrust­wor­thy attor­ney is cho­sen.

The law in this area is changing
There have been recent changes to the law in regard to pow­ers of attor­ney, being amend­ments to the Pow­ers of Attor­ney Act 2003 and the Pow­ers of Attor­ney Reg­u­la­tion 2011. The new forms (a sep­a­rate doc­u­ment for endur­ing pow­er of attor­ney and a sep­a­rate doc­u­ment for gen­er­al pow­er of attor­ney) became avail­able for use on 13 Sep­tem­ber 2013. Before these changes, there was only one form to be used for both types of pow­er of attor­ney, so now it is much eas­i­er to dis­tin­guish between the dif­fer­ent types of pow­er of attor­ney to be signed.

Oth­er changes include: changes to the method of appoint­ment of sub­sti­tute attor­neys; changes in regard to joint attor­neys; and changes to the pro­vi­sion in the doc­u­ment to be signed by the attor­ney. Now, attor­neys must acknowl­edge their respon­si­bil­i­ties in clear terms as follows:

  1. ” I accept that I must always act in the principal’s best interests.
  2. I accept that as attor­ney I must keep my own mon­ey and prop­er­ty sep­a­rate from the principal’s mon­ey and property.
  3. I accept that I should keep rea­son­able accounts and records of the principal’s mon­ey and property.
  4. I accept that unless express­ly autho­rised, I can­not gain a ben­e­fit from being an attorney.
  5. I accept that I must act hon­est­ly in all mat­ters con­cern­ing the principal’s legal and finan­cial affairs.”

Get the right advice

A pow­er of attor­ney may nev­er be used, but it is an essen­tial doc­u­ment for those who would like to keep those they trust in con­trol of their legal and finan­cial affairs. The changes in the law and the impor­tance of the top­ic mean this is the per­fect time to make sure your affairs are in order.